Health

Gov. Brown mulls bill capping out-of-pocket drug costs

California Governor Jerry Brown is mulling whether to sign AB 339, which would cap copays and coinsurance for a single 30-day prescription at $250, or $500 for people on bronze-level plans.
California Governor Jerry Brown is mulling whether to sign AB 339, which would cap copays and coinsurance for a single 30-day prescription at $250, or $500 for people on bronze-level plans.
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Among the legislation state lawmakers have sent to Gov. Jerry Brown for his consideration is a bill that would cap out-of-pocket costs for prescription drugs.  Supporters say it would help those saddled with the high cost of drugs for some serious conditions; the health insurance industry says it would just shift costs around. 

AB 339, by Assemblyman Rich Gordon (D-Menlo Park), would cap copays and coinsurance for a single 30-day prescription at $250, or $500 for people on bronze-level plans.

For people with high-deductible plans, the caps would only take effect once they've reached their deductible and their coverage kicks in. The caps would sunset on January 1, 2020.

The bill is intended to provide relief to people who rely on expensive drugs for chronic conditions like cancer, HIV/AIDS, hepatitis and multiple sclerosis. These patients could reach their annual out-of-pocket limit ($6,600, as established by the Affordable Care Act) with just one 30-day prescription.

Those high out-of-pocket costs force patients "to choose between paying for their life-saving drugs and paying for housing, child care, or food," Gordon said in a statement. "In turn, many are suffering, and even face death, from illnesses that are treatable."

The health insurance industry says it shares consumers' concerns about drug prices. But under this bill, the cost of these drugs would be shifted from patients' co-pays to premiums, and therefore wouldn't help tackle the larger issue of high drug prices, according to Nicole Evans of the California Association of Health Plans.

Rather than writing drug caps into law, "prescription drug out-of-pocket costs should be handled by payers, like Covered California and CalPERS, which can adjust out-of-pocket costs on an annual basis as they look broadly at health care and coverage costs," Evans said.

Brown has until Oct.11 to sign or veto the bill.

Covered California approved similar drug caps in March for policies sold through the state's health insurance exchange.  Beginning in 2016, people on most silver, gold and platinum-level plans bought through Covered California will pay up to $250 per specialty drug prescription per month.